Sustainable development recognizes that growth must be both inclusive and environmentally sound to reduce poverty and build shared prosperity for today’s population and to continue to meet the needs of future generations. It must be efficient with resources and carefully planned to deliver immediate and long-term benefits for people, planet, and prosperity.
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Earlier in the day, Sweden’s Finance Minister Magdalena Andersson described to another packed room of government officials and leaders from business and civil society how her country had implemented a... Show More + high carbon tax tailored to their economy and, over time, had decoupled growth from emissions.“It has made Sweden a driver of economic growth and efficiency,” Andersson said. “You can combine steady economic growth with a reduction of greenhouse gases.”Friends of Fossil Fuel Subsidy Reform, a coalition of eight countries, was joined by France in taking on another potential source of climate finance and greenhouse gas reductions: the group released a communique calling for the phase-out of subsidies in the lead-up to the Paris conference, arguing that the harmful subsidies encourage waste and disproportionately benefit wealthier households. The nearly $550 billion a year spend on fossil fuel subsidies can be reallocated for better public use, including climate finance for sustainable development.Central banksOn the larger question of economic transformation, the UNEP Inquiry led a discussion on “a quiet revolution” underway to redesign financial systems for low-carbon growth. Financial regulators, standard-setters, and banks are rethinking the rules governing financial systems from a sustainability perspective, the speakers said.Ma Jun, chief economist of the People’s Bank of China, offered a snapshot of some of the innovations being discussed in China as the country drafts its 13th Five-Year Plan. In the next five years, he said, China will need about 2 trillion yuan (US$322 billion) in annual investment. The fiscal system can meet about 15 percent of that, he said, leaving a large percentage to be filled by the private sector.China is discussing greater use of green bonds, discounted loans for climate-friendly projects, the development of green banks and green funds, and it has seven pilot carbon markets and plans to launch a national carbon market as early as 2016. The chief economist suggested that public-private partnership financing could help increase the participation of the private sector in infrastructure projects.Private investmentThe meetings reflected a growing understanding in the private and public sectors of the risks that climate change poses to supply chains, business assets, and society at large. Investors, particularly long-term investors like pension funds, which were represented at the meetings, have been increasing pressure on companies to shift toward cleaner investments and avoid high-emitting assets that could become stranded in an economy evolving away from fossil fuels.Atiur Rahman, governor of Bangladesh’s central bank, told the EIB-World Bank event that he sees mindsets changing in the country’s banks and increasing support for green projects. One driver, he said, has been leadership since the central bank began to focus on climate impact.Stranded assets pose another risk flagged by investors in several sessions, including Carbon Tracker’s discussion of the limits to how much of the world’s fossil fuel reserves can be burned and still keep the planet from warming more than 2 degrees Celsius and what that means for the construction of power sources today.The magnitude of the finance challenges ahead and the discussions made clear the need to build on one another’s work and set targets, said World Bank Group Vice President and Special Envoy for Climate Change Rachel Kyte. “One thing that came through very clear is that you have to know where you're going. You have to have clear goals and targets at the national level,” Kyte said. Shifting the world to a cleaner trajectory will require nothing short of economic transformation. Show Less -